Our friendly mortgage specialists will work closely with you to find the finance solution that suits you. There are various types of home loans, all offering different rates and features. We are here to help you to understand what is right for you.
It’s more than the interest rate
Interest rates are relevant and they are an important factor to consider when deciding which loan is right for you. However it’s also important to set up the right loan structure from day one. We are here to help you consider all the factors before you jump in.
BASIC HOME LOAN
FIXED RATE LOAN
INTRODUCTORY/HONEYMOON RATE HOME LOAN
LENDERS MORTGAGE INSURANCE
LINE OF CREDIT
PRINCIPAL AND INTEREST REPAYMENTS
VARIABLE RATE LOAN
SELF MANAGED SUPER FUND
A no-frills loan with a low variable interest rate and little or no fees. Doesn’t usually have special features like offset.
For when you need to access funds for a limited time only. This type of financing usually is a result of an overlap of two properties.
Access funds as they are required at the various stages of building.
A Fixed Rate Loan is a loan where the interest rate is guaranteed to remain the same during an initial term, regardless of what may occur in the market with variable rate loans. Traditionally lenders have offered terms of between 1 – 5 years for fixed rates, however some Lenders may offered terms of up to 10 years. These loans may have limited flexibility and will usually revert to a variable rate loan at the end of the specified period.
Where you make only interest payments on your loan for a set period. This means that the monthly repayment has no principal reduction component, and the outstanding loan balance will remain unchanged during the term of the interest only period. For example, and loan with a 30 year term may have a 5 year interest only term, followed by a 25 year principal and interest term.
Some lenders may offer a lower initial rate at the beginning of your loan term. May suit those looking to minimise payments in the short term.
A loan where the funds are used for investment purposes. May be a tax-effective loan for investors.
Lender’s Mortgage Insurance (LMI) is an insurance policy obtained by the lender, but paid for by you the borrower. It is for the protection of the lender and protects them against any losses where you default on your loan. If the bank sells the security property and there are not adequate funds to cover the outstanding loan and any fees and charges that may have accrued this insurance would be applied.
LMI is usually taken by the lender when the value of the loan requested exceeds 80% of the value of the security property.
A pre-approved loan limit which can be drawn down as required. Also known as Equity loans or Revolving Line of Credit.
A transactional bank account that is linked to your loan. Allows the funds in this account to be used as a way to reduce interest paid on your loan. For example, if you have a loan with a balance of $100,000, and an offset account with a balance of $10,000, then interest is calculated on the net balance of $90,000.
Where your regular payment includes both interest and a portion of the original loan. You will be paying down the loan when making this type of repayments.
A combination of various banking products which may include your loan, an offset account, credit card. Usually includes a discounted interest rate negotiated by your mortgage specialist.
A feature which allows you to make additional repayments to reduce the loan amount and minimize the interest incurred. You can then redraw those additional repayments if/when needed. For example, if you have been paying an additional $500 per month off your loan, after 12 months, you would be able to redraw $6,000.
A loan where the interest rate can fluctuate at any time. Usually the lender will have a Standard Variable Rate and your mortgage specialist will renegotiate a discounted rate on your behalf. Features can include offset and redraw.
A loan that is taken out between a lender and a self-managed super fund for the purpose of purchasing an asset. Usually a Limited Recourse Borrowing Arrangement (LBRA).
A loan which is split between fixed and variable interest rates.